The performance divergence between equities and the ratio that began in March appears in hindsight as an artifact of the equity markets upside break of the Meridian ceiling that occurred as well that month.
Until we see conditions and relationships change, we expect that both the ratio and the equity markets will continue trending higher over time.
As expected, higher beta indexes such as the RUT and the Nasdaq have taken a breather (relative to the SPX) this quarter.
Based on our historic momentum comparative with oil (which arguably has been one of the more accurate guides for appraising Apple over the past year) - the next leg higher for the stock will begin towards the end of the quarter and close the year on a high note.Picking up where we left off on Friday, the apartment house rules of the euro/dollar exchange rate would imply that another bout of deflationary concerns in Europe may translate stateside in the US to a weaker dollar and downstream with higher commodity prices.
While more than just a semantic debate and certainly not good inflation per se, in this FX high-rise - one man's ceiling is another man's floor.
Our biggest short-term concerns remain overseas in Japan and with the yen's potential to dislocate from the relative equilibrium and narrowing range it has traded in over the past six months.
* All stock chart data originally sourced and courtesy of www.stockcharts.com
* Subsequent overlays and renderings completed by Market Anthropology